18 May, 2016 Amsterdam – With the participation of many of their volunteer members, NCREIF, PREA, INREV and ANREV are pleased to present Setting the Right Path for Global Real Estate Standards: Fee and Expense Metrics – Phase I Results – the first joint publication towards global reporting standards. The Setting the Right Path for Global Real Estate Standards: Fee and Expense Metrics – Phase I Results bridges gaps in terminology and associated definitions of the most common fees and costs.
Investors can use this report guidance to enhance their understanding of fees (between investment managers and their investors) and costs (charged to a fund by external service providers). These include the Total Expense Ratio (TER) and the Real Estate Expense Ratio (REER) contained in the INREV Guidelines and the Real Estate Fees and Expenses Ratio (REFER) contained in the NCREIF PREA Reporting Standards. In 2017 we expect to build on this product as we complete the development of a globally consistent set of measures of fees and costs; thereby equipping investors with the tools needed to compare costs across regions.
Representatives from each association worked together to jointly develop this report. The Global Standards Steering Committee (SSC) sets the priorities for our collaboration efforts. John Caruso, Senior Director at TIAA and member of the NCREIF PREA Reporting Standards Council, along with Neil Harris, Senior Vice President at GIC and INREV Chairman, co-chair the committee. According to Mr. Caruso:
The focus of the SSC and the sponsoring organizations is the development of global standards which provide investors more comparable and transparent information that can be used to facilitate informed decision making. Fees and expense loads are always near the top of considerations investors have when making an investment. The ability to compare costs on a global basis helps level the playing field for investors and is an important first step towards global standards.
The SSC has other projects progressing including a converged glossary of terms and also reporting asset management information similar to that provided within INREV’s Standard Data Delivery Sheet. They have also begun discussing Net Asset Value (NAV). “A globally consistent calculation of NAV will catapult our ability to converge many key measures of performance including time-weighted returns. We are in the initial phases of discussion for this challenging project and will provide updates as the project progresses,” stated Mr. Harris.
We assert that globally consistent reporting standards must be developed by industry practitioners and welcome multiple perspectives in the discussion. Please contact Maurits Cammeraat, INREV Director of Professional Standards.
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For further information, please contact:
For further information please contact:
Johlyn Da Prato - johlyn.da.prato@inrev.org
INREV: +31 (0) 20 799 3968
Notes to editors:
About INREV
INREV, the European Association for Investors in Non-listed Real Estate Vehicles, was launched in May 2003 to act for investors and other participants in the growing non-listed real estate vehicles sector. The non-profit association is based in Amsterdam, the Netherlands. INREV aims to create a forum for the sector and increase the transparency and accessibility of non-listed vehicles, to promote professionalism and clarify best practice and to share and spread knowledge. INREV currently has 384 members drawn from leading institutional investors, fund managers, promoters and advisors across Europe and elsewhere.
For further information, please visit https://www.inrev.org.